PSEi seen to hit 7,000 this year
MANILA, Philippines - Corporate earnings are expected to grow by an average of 15% this year, according to an analyst.
Ricky Lorayes, head of research at Strategic Equities, said Philippine companies are seen to continue strong growth this year.
"In general when you see a GDP number, that translates to a multiple of times 2 or times 4 depending on the size of the company... With 6.5% (GDP), that's still very good. We expect 15% earnings growth this year on the average, some will grow by 20-25%, others by 10-12%. But by and large 15% average for the country, that's fairly good," he told ANC.
Lorayes also sees the Philippine Stock Exchange index (PSEi) hitting a high of 7,000 this year, before settling at 6,800 by year-end.
So far, the PSEi has been up 10% year-on-year, as foreign fund managers and investors returned.
"The return of the foreign fund managers and investors in the stock market is largely due to the fact that things aren't as dire as initially expected. Late last year we got hit badly by typhoon Yolanda. The initial estimates and expectations were it's bad. GDP growth rate would slow down substantially, etc. After the waters have settled, a reassessment was made. GDP would slowdown, not like last year's 7%, but still respectable 6-6.5%," Loyares said.
Last November, super typhoon "Yolanda" (Haiyan) devastated parts of central Philippines. Rehabilitation efforts for the Visayas are still on-going.
In 2013, the Philippine economy expanded by a faster-than-expected 7.2%. The government is targeting 6.5 to 7.5% GDP growth in 2014.